Government spending, taxes, and the cost of public services remain controversial among families, communities, and certainly on social media. Beneath arguments about tax levels and spending are actual government operations — systems and processes that have developed from necessity.
As opinions vary widely on what is worth paying for, the consumer price index (CPI) often is touted as a benchmark that government agencies should match in tax levy requirements. Unfortunately, CPI is not always a practical benchmark for government operations.
CPI is a measure of the average change of prices on a sample group of consumer goods. It’s based on more than 200 categories of spending, can be viewed as a cost-of-living index, and is used to calculate the inflation rate.
So why doesn’t it work as a benchmark for a local tax levy? Because government agencies have expenses that aren’t consumer goods (e.g., streetlights, building maintenance). More importantly, government is managed by people. Salaries for police officers, librarians, teachers, and park district staff are not consumer products. Most local government spending is for the people who deliver services to the community.
The U.S. Bureau of Labor Statistics reports that in our area wages and salaries for private industry workers increased 2.8 percent for the 12-month period ending in December 2020. For state and local government workers, they increased 1.8 percent. On average, then, government wages and salaries increased at a lower rate than the private sector.
For the Chicago area, the CPI percent change dropped from 2.6% in January 2020 to 0.9% in December 2020. So should government agencies be limited to a 0.9% levy increase? If so, cuts would need to be made, either by reducing programs, services, or workers, because cost drivers in government continue to rise above CPI.
Looking just at the Oak Park Public Library, because the final debt payment for the 17-year bond, issued by referendum, was paid in 2020, residents will experience an 8.65% decrease in the tax levy for library services. With reduced revenue expected from other account lines (e.g., service charges, parking lot revenue, interest), the total revenue budget for 2021 decreased 0.7% from 2020.
Bottom line: If we use CPI as the limit to which government agencies can increase the tax levy, we erode government maintenance and services. This erosion can lead to higher turnover costs in staffing, or we come to a point when a large referendum is necessary for failing infrastructures and services.
We all have opinions on government spending and the services we expect. If you don’t have a fire, you don’t need firefighters. If you don’t have children in school or use the public library, maybe you don’t feel you should pay for those. But we all benefit from public goods regardless of personal use, as they contribute to the kind of community we live in.
The question becomes, what sort of community do you want to live in?
Jeremy Andrykowski is the director of operations at the Oak Park Public Library. More at oppl.org.
